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The legislative purpose underlying the section 72(t) tax is
that “‘premature distributions from IRAs frustrate the intention
of saving for retirement, and section 72(t) discourages this from
happening’”. Arnold v. Commissioner, 111 T.C. 250, 255 (1998)
(quoting Dwyer v. Commissioner, 106 T.C. 337, 340 (1996)); S.
Rept. 93-383, at 134 (1974), 1974-3 C.B. (Supp.) 80, 213.
Respondent argues that petitioner’s periodic professional
consultations with physicians for lower back pain and arthritis
in the left knee do not constitute “disabled” within the meaning
of section 72(m)(7).1
Section 72(m)(7) provides:
(7) Meaning of disabled.-- For purposes of this
section, an individual shall be considered to be
disabled if he is unable to engage in any substantial
gainful activity by reason of any medically
determinable physical or mental impairment which can be
expected to result in death or to be of long-continued
and indefinite duration. An individual shall not be
considered to be disabled unless he furnishes proof of
the existence thereof in such form and manner as the
Secretary may require.
1 The Commissioner’s determinations are presumed correct,
and generally taxpayers bear the burden of proving otherwise.
Rule 142(a)(1); Welch v. Helvering, 290 U.S. 111, 115 (1933).
Under section 7491, the burden of proof shifts from the taxpayer
to the Commissioner if the taxpayer produces credible evidence
with respect to any factual issue relevant to ascertaining the
taxpayer’s tax liability. Sec. 7491(a)(1). Petitioner does not
argue that the burden of proof should be shifted to respondent
under section 7491. Regardless of whether the sec. 72(t)
additional tax is an “additional amount” to which sec. 7491(c)
would apply, petitioner has met his burden of showing that he was
disabled at the time of the distribution.
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Last modified: May 25, 2011